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	First-tier Tribunal (Tax)
You are here: BAILII >> Databases >> First-tier Tribunal (Tax) >> The Depot v Revenue & Customs [2009] UKFTT 51 (TC) (16 April 2009) URL: http://www.bailii.org/uk/cases/UKFTT/TC/2009/TC00030.html Cite as: [2009] UKFTT 51 (TC), [2009] UKFT 00030 (TC)

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TC00030

Appeal number LON/08/2449

DEFAULT SURCHARGE - reasonable excuse - appeal dismissed.

FIRST-TIER TRIBUNAL

TAX

THE DEPOT LIMITED Appellant

- and -

THE COMMISSIONERS FOR HER MAJESTY'S

REVENUE AND CUSTOMS (VAT) Respondents

TRIBUNAL: Richard Barlow

M Hossain FCA FCIB

Sitting in public in London on 18 March 2009

Mr Paul Rowland, director, for the Appellant

Miss S Jones instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Respondents

© CROWN COPYRIGHT 2009


 


DECISION

1. The appellant appeals against a default surcharge issued on 15 August 2008 in the sum of £1,373.16 in respect of the three month prescribed accounting period ending 30 June 2008. That surcharge was issued because the Appellant did not make the payment of tax due until 8 August 2008, being one day later than it should have made the payment by electronic means of eight days later than if it had made the payment by non-electronic means.
2. The payment was in fact made electronically.
3. The default gave rise to a surcharge at the rate of 10% because the Appellant had defaulted in respect of previous periods though, either by reason of the de minimis rules (or concessions) or by reason that one of the previous defaults had related to a late delivery of the return rather than late payment, this was the first occasion on which the Appellant had been subject to a surcharge as opposed to a surcharge liability extension notice.
4. Mr Rowland gave evidence which we accepted and find was the truth. He stated that he had intended to make the payment on time by the CHAPS system but that on the occasion in question he had arrived at the Bank on 7th August expecting to be in time to arrange for the payment to be sent that day but that there was a queue and the Bank required more paperwork to be completed than the Bank he had previously used (having just changed Banks) and that the transaction was not therefore dealt with until 3.30pm which meant it was not actually effected until the next day.
5. Mr Rowland explained that the business, which is a bar and restaurant, operates in an area where there is a lot of crime and he was the only member of staff at the premises until 3pm. He had to be there in case any deliveries were made because if no staff were there the deliveries might be left on the doorstep and they would be stolen.
6. We sympathise with that but Mr Rowland admitted that, although this was the first time he had made a CHAPS payment for VAT at the new Bank, he had made such payments there for other purposes and had had similar problems with delays though none had been made later than 3.15pm.
7. He also admitted that he could have called another member of staff in early that day if he had decided to leave for the Bank before 3pm.
8. The company had defaulted on four previous occasions between April 2006 and April 2008 and so, although this occasion was the first that gave rise to a default surcharge as opposed to what might be thought of as a warning, the company had a bad record of compliance and it could reasonably have been expected that it would take care to ensure that payment was made on time. Given the fact that Mr Rowland knew there could be a delay at the Bank we do not consider that the company took sufficient care for it to be able to say it had a reasonable excuse for the late payment and so we reject the appeal and hold that the surcharge remains payable.

Richard Barlow

TRIBUNAL JUDGE

RELEASE DATE:16 April 2009